M/I Homes (MHO) vs. William Lyon Homes (WLH) Head-To-Head Survey

M/I Homes (NYSE: MHO) and William Lyon Homes (NYSE:WLH) are both small-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Volatility and Risk

M/I Homes has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, William Lyon Homes has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500.

Insider & Institutional Ownership

96.1% of M/I Homes shares are held by institutional investors. Comparatively, 96.7% of William Lyon Homes shares are held by institutional investors. 4.7% of M/I Homes shares are held by company insiders. Comparatively, 21.3% of William Lyon Homes shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares M/I Homes and William Lyon Homes’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
M/I Homes $1.96 billion 0.43 $72.08 million $2.27 13.66
William Lyon Homes $1.41 billion 0.55 $59.69 million $1.53 15.86

M/I Homes has higher revenue and earnings than William Lyon Homes. M/I Homes is trading at a lower price-to-earnings ratio than William Lyon Homes, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for M/I Homes and William Lyon Homes, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
M/I Homes 0 1 2 0 2.67
William Lyon Homes 0 1 2 0 2.67

M/I Homes presently has a consensus price target of $39.50, suggesting a potential upside of 27.42%. William Lyon Homes has a consensus price target of $33.00, suggesting a potential upside of 36.03%. Given William Lyon Homes’ higher probable upside, analysts plainly believe William Lyon Homes is more favorable than M/I Homes.

Profitability

This table compares M/I Homes and William Lyon Homes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
M/I Homes 3.56% 12.66% 5.06%
William Lyon Homes 3.61% 9.33% 3.58%

Summary

William Lyon Homes beats M/I Homes on 7 of the 12 factors compared between the two stocks.

About M/I Homes

M/I Homes, Inc. is a builder of single-family homes. The Company consists of two operations: homebuilding and financial services. It operates through Midwest homebuilding, Southern homebuilding, Mid-Atlantic homebuilding and financial services operations segments. The Company and its subsidiaries are engaged primarily in the construction and sale of single-family residential homes in 15 markets: Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Tampa, Orlando and Sarasota, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C. The Company’s financial services operations support its homebuilding operations by providing mortgage loans and title services to the customers of its homebuilding operations. It markets and sells homes primarily under the M/I Homes brand (M/I Homes and Showcase Collection (by M/I)).

About William Lyon Homes

William Lyon Homes is primarily engaged in the design, construction and sale of single family detached and attached homes in California, Arizona and Nevada. The Company conducts its homebuilding operations through four reportable operating segments: Southern California, Northern California, Arizona and Nevada. For the three months ended March 31, 2012, 37% of home closings were derived from the Company’s California operations. The Company designs, constructs and sells a range of homes designed to meet the needs of each of its markets, although it primarily focuses sales to the entry-level and first time move-up home buyer markets. During the year ended December 31, 2011, the Company marketed its homes through 19 sales locations. In October 2013, the Company purchase 221 homesites at the master-planned Southshore community in Aurora, Colorado.

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